It is almost time for eBay Inc. (NASDAQ: EBAY) to spin off PayPal. So investors may be asking themselves if eBay is now a value stock. Wells Fargo’s Matt Nemer has the answer to that question in the firm’s recent report.

Wells Fargo believes the imminent spin-off of PayPal will create a unique value opportunity, as many growth-oriented investors likely sell shares of the remaining parent company. In the firm’s view, this sets up an interesting entry point, as eBay operates an arguably better business model than most retailers.

The brokerage firm estimates the stand-alone eBay asset currently trades at an implied value of roughly $20 per share. At the same time, Wells Fargo estimates the value of embedded but noncore assets to be collectively worth more than $2.00 per share.

The eBay Marketplaces is the second largest e-commerce company in the United States by gross merchandise value, second only to Amazon.com Inc. (NASDAQ: AMZN). It has over 157 million active buyers, 25 million active sellers and 800 million live listings.

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While the business is facing current headwinds from last year’s data/password breach, changes in Google search algorithms and competition from emerging niche marketplaces, Wells Fargo believes estimates have been de-risked, as fiscal 2016 guidance essentially assumes no improvement from current levels.

As a result, Wells Fargo raised its valuation range for eBay shares to $68 to $69 from $61 to $63, based solely on an updated sum-of-the-parts (SOTP) analysis. Risks to the valuation range include deceleration in e-commerce growth, increased competition and external factors.

Wells Fargo gave its investment thesis as:

We believe the stock’s risk reward remains attractive, driven by the risk side of the equation given the stable cash flow, inexpensive valuation, and upcoming catalysts (PayPal and potential Enterprise spin off), although we still see modest upside potential to our SOTP value of $68-$69.

Shares of eBay closed most recently at $61.85. The stock has a consensus analyst price target of $63.89 and a 52-week trading range of $46.34 to $63.30.

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